HB 642-FN-LOCAL – AS AMENDED BY THE HOUSE
18Jan2006… 0141h
2005 SESSION
06/10
HOUSE BILL 642-FN-LOCAL
AN ACT relative to the regulation of home inspectors.
COMMITTEE: Municipal and County Government
This bill establishes the licensure of persons providing home inspection services and the regulation of such persons by a board of home inspectors.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
18Jan2006… 0141h
05-0549
06/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Five
AN ACT relative to the regulation of home inspectors.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Home Inspectors. Amend RSA by inserting after chapter 329-A the following new chapter:
CHAPTER 329-B
329-B:1 Purpose. The purpose of this chapter is to protect the people of the state of New Hampshire by requiring the licensing of home inspectors to assure that consumers of home inspection services can rely on the competence of a home inspector.
329-B:2 Definitions. In this chapter:
I. “Apprentice’’ means any person who is engaged in learning and assisting in home inspection under an apprenticeship program acceptable to the board.
II. “Board’’ means the board of home inspectors, established by RSA 329-B:3.
III. “Home inspection” means a visual analysis for the purposes of providing a professional opinion of the condition of a residential building and its related structures, any reasonably accessible installed components and the operation of the building systems, including the controls normally operated by the owner, for the following components of a residential building of 4 units or less: heating system, electrical system, cooling system, plumbing system, structural components, foundation, roof covering, exterior and interior components and site aspects as they affect the building. Home inspection shall not require identifying concealed conditions or latent defects.
IV. “Home inspector” means any person who is licensed by the board as a home inspector and who engages in the business of performing home inspections and writing home inspection reports.
V. “Home inspection” report means a written report prepared by a home inspector for compensation and issued after a home inspection. The inspector shall report:
(a) On those systems and components inspected which, in the professional opinion of the inspector, are significantly deficient or are near the end of their service lives.
(b) A reason why, if not self-evident, the system or component is significantly deficient or near the end of its service life.
(c) The inspector’s recommendations to correct or monitor the reported deficiency.
(d) Any systems and components designated for inspection which were present at the time of the inspection but were not inspected, and a reason they were not inspected.
VI. “Residential building” means a structure consisting of from one to 4 family dwelling units, and including a single-family home, a multifamily dwelling, manufactured housing as defined in RSA 384:16-d, II, and any single family condominium unit, wholly or partly used or occupied, or intended to be used or occupied, as the home or residence of one or more persons.
329-B:3 Board.
I. There shall be a board of home inspectors, consisting of 5 members, including 2 home inspectors, one real estate broker licensed under RSA 331-A, one attorney licensed to practice in this state, and one public member, each to be appointed by the governor, with the approval of the council, to a term of 4 years. No member of the board shall be appointed to more than 2 terms.
II. The public member of the board of home inspectors shall be a person who is not, and never has been, a home inspector or the spouse of a home inspector, and who does not have, and never has had, a material financial interest in either the provision of home inspection services or an activity directly related to the home inspection profession at any time during the 5 years preceding appointment.
III. The board shall be an administratively attached agency, under RSA 21-G:10, to the department of state.
329-B:4 Compensation and Expenses. Members of the board shall each be allowed the sum of $30 per day and their necessary traveling expenses incurred in carrying out their official duties.
329-B:5 Organization and Meetings. The board shall hold at least 4 regular meetings each year, and special meetings may be held at such times as the business of the board may require. Notice of all meetings shall be given in such manner as the rules of the board may provide. The board shall annually elect a chairperson and a vice-chairperson from among its members. A quorum of the board shall consist of not less than 3 members, at least one of whom shall be a public member.
329-B:6 Fees. The board shall establish fees for examination of applicants, for licensure and for renewal of licensure to practice under this chapter, and for transcribing and transferring records and other services. The fees established by the board shall be sufficient to produce estimated revenues equal to 125 percent of the direct operating expenses of the board for the previous fiscal year.
329-B:7 Receipts and Disbursements. The board shall receive and account at least monthly for all moneys derived under the provisions of this chapter, and shall pay the same to the state treasurer. The board may employ such clerical or other assistants as are necessary for the proper performance of its work, and may make expenditures from this fund for any purpose which, in the opinion of the board, is reasonably necessary for the proper performance of its duties under this chapter. Under no circumstances shall the total amount of payments made hereunder exceed the amount of the fees collected hereunder. Any balance in the account shall lapse at the end of each fiscal year.
329-B:8 Examinations. The board shall have authority to examine and license home inspectors. When issued, such license shall be valid throughout the state, and the licensee shall be entitled to perform the work of a home inspector anywhere within the state without any payment or additional fee. Each applicant for a license shall present to the board on a blank furnished by the board a written application for license, containing such information as the board may require, accompanied by the required fee. Such examinations shall be held at such times and places as the board shall determine. The scope of such examinations and the methods of procedure shall be prescribed by the board.
329-B:9 Rulemaking. The board shall adopt rules, pursuant to RSA 541-A, relative to:
I. The design and content of all forms and applications required under this chapter.
II. The application procedure for a license to practice under this chapter.
III. The qualifications of applicants in addition to those requirements set under this chapter.
IV. How an applicant shall be examined, including the time, place, type and form of the examination.
V. The disposition of examinations, including provision of test results to examinees.
VI. How a license to practice under this chapter shall be renewed, including the requirements for continuing education.
VII. The establishment of all fees required under this chapter.
VIII. Ethical and professional standards required to be met by each holder of a license to practice under this chapter and how disciplinary actions by the board shall be implemented for violations of these standards.
IX. The training and experience requirements of home inspectors, and of apprentices.
X. Procedures for the conduct of hearings consistent with the requirements of due process.
329-B:10 License Criteria.
I. No person shall provide, nor present, call or represent himself or herself as able to provide a home inspection for compensation unless licensed in accordance with the provisions of this chapter. No business entity may provide home inspection services unless each of the home inspectors employed by the business entity is licensed in accordance with the provisions of this chapter. No business entity may use, in connection with the name or signature of the business entity, the title “home inspectors” to describe the business entity’s services, unless each of the home inspectors employed by the business entity is licensed in accordance with the provisions of this chapter.
II. To be eligible for a license as a home inspector, an applicant shall fulfill the following requirements:
(a) Be of good moral character.
(b) Have successfully competed high school or its equivalent.
(c) Have completed a course of study of no less than 80 hours that covers all of the following components of a residential building of 4 units or less: heating system, cooling system, plumbing system, electrical system, structural components, foundation, roof covering, exterior and interior components and site aspects as they affect the building.
(d) Have acquired the required training and experience requirements as established by the board.
329-B:11 Expiration and Renewal. Notwithstanding any outstanding license to the contrary, all licenses issued by the board shall expire on the last day of the month of the licensee’s birth, but may be renewed during the following month, retroactive to the first day of the month. The fee for renewal of all licenses issued under this chapter shall be established by the board. Upon failure to pay the renewal fee within the required period, a licensee may renew his or her license by submitting the required fee plus $10 before the last day of the second month following the month of his or her birth. Any application received thereafter shall be rejected, unless accompanied by proof of successful completion of the examination required under RSA 329-B:8. A licensed home inspector shall complete at least 20 hours of board approved continuing education during each calendar year in order to maintain his or her license.
329-B:12 Exclusions. A licensed home inspector shall not be required to perform any action or make any determination unless specifically required by lawful authority. Inspectors are not required to determine:
I. The condition of systems or components which are not readily accessible.
II. The remaining life of any system or component.
III. The strength, adequacy, effectiveness or efficiency of any system or component.
IV. The causes of any condition or deficiency.
V. The methods, materials, or costs of corrections.
VI. Future conditions including, but not limited to, failure of systems and components.
VII. The suitability of the property for any specialized use.
VIII. Compliance with regulatory requirements (codes, regulations, laws, ordinances, etc.).
IX. The market value of the property or its marketability.
X. The advisability of the purchase of the property.
XI. The presence of potentially hazardous plants or animals including, but not limited to, wood destroying organisms or diseases harmful to humans.
XII. The presence of any environmental hazards including, but not limited to, toxins, carcinogens, noise, and contaminants in soil, water and air.
XIII. The effectiveness of any system installed or methods utilized to control or remove
suspected hazardous substances.
XIV. The operating costs of systems or components.
XV. The acoustical properties of any system or component.
329-B:13 Reciprocity. Upon payment to the board of a fee and the submission of a written application form provided by the board, the board shall issue a home inspector license to any person who holds a valid license, certificate, or registration issued by another state or possession of the United States or the District of Columbia that has standards substantially equivalent to, or exceeding, those of this state, as determined by the board.
329-B:14 Persons Not Required to be Licensed. Nothing in this chapter prevents:
I. A person who is employed by a governmental entity from inspecting residential buildings if the inspection is within official duties and responsibilities.
II. A person from performing a home inspection if the inspection will be used solely by a bank, savings and loan association or credit union to monitor progress on the construction of a residential structure.
III. A person who is employed as a property manager for a residential structure and whose official duties and responsibilities include inspecting the residential structure from performing an inspection on the structure if the person does not receive separate compensation for the inspection work.
IV. A person who is regulated in another profession from acting within the scope of that person’s license, registration or certification.
329-B:15 Disciplinary Action.
I. The board may undertake disciplinary proceedings:
(a) Upon its own initiative; or
(b) Upon written complaint of any person which charges that a person licensed by the board has committed misconduct under paragraph II and which specifies the grounds therefor.
II. Misconduct sufficient to support disciplinary proceedings under this section shall include:
(a) The practice of fraud or deceit in procuring or attempting to procure a license to practice under this chapter;
(b) Conviction of a felony or any offense involving moral turpitude;
(c) Any unprofessional conduct, or dishonorable conduct unworthy of, and affecting the practice of, the profession;
(d) Unfitness or incompetency by reason of negligent habits or other causes; or negligent or willful acts performed in a manner inconsistent with the health or safety of persons under the care of the licensee;
(e) Addiction to the use of alcohol or other habit-forming drugs to a degree which renders him or her unfit to practice under this chapter;
(f) Mental or physical incompetency to practice under this chapter;
(g) Willful or repeated violation of the provisions of this chapter; or
(h) Suspension or revocation of a license, similar to one issued under this chapter, in another jurisdiction and not reinstated.
III. The board may take disciplinary action in any one or more of the following ways:
(a) By reprimand;
(b) By suspension, limitation or restriction of license or certification for a period of up to 5 years;
(c) By revocation of license or certification;
(d) By requiring the person to participate in a program of continuing education in the area or areas in which he or she has been found deficient;
(e) By requiring the home inspector to obtain insurance against loss, expense and liability resulting from errors and omissions or neglect in the performance of services as a home inspector; or
(f) By requiring the home inspector to file with the board a bond that is furnished by a company authorized to do business in this state and is in the amount approved by the board.
329-B:16 Prohibited Acts. A licensed home inspector shall be prohibited from the following:
I. Performing or offering to perform, for an additional fee, any repairs to a structure on which the inspector, or the inspector’s company, has prepared a home inspection report in the past 12 months, except that a home protection company that is affiliated with or that retains a home inspector does not violate this section if it performs repairs pursuant to a claim made under a home protection contract.
II. Inspecting for a fee any property in which the inspector, or the inspector’s company, has any financial interest or any interest in the transfer of the property.
III. Offering or delivering any compensation, inducement or reward to the owner of the inspected property, the broker or agent, for the referral of any business to the inspector or the inspection company.
IV. Accepting an engagement to make an inspection or to prepare a report in which the inspection itself, or the fee payable for the inspection, is contingent upon either the conclusions in the report, preestablished findings, or the close of escrow.
329-B:17 Liability of Home Inspectors.
I. An action to recover damages for any act or omission of a home inspector relating to a home inspection that he or she conducts may only be commenced within 1 year after the date that a home inspection is completed.
II. Only a client and no other party shall have an action to recover damages arising from a home inspection or a home inspection report.
329-B:18 Appeals. Any person affected by a final decision of the board may appeal such final decision pursuant to RSA 541.
2 Effective Date. This act shall take effect January 1, 2007.
LBAO
05-0549
Amended 2/27/06
HB 642 FISCAL NOTE
AN ACT relative to the regulation of home inspectors.
FISCAL IMPACT:
The Department of State has determined this bill, as amended by the House (Amendment #2006-0141h), will increase state general fund revenue and expenditures by an indeterminable amount in FY 2007 and each year thereafter. There will be no fiscal impact on county and local revenue or expenditures.
METHODOLOGY:
The Department of State indicates this bill would administratively attach a newly created Home Inspectors Board to the Department. The Department assumes the only assistance the Department will provide to this Board would be to present its budget within the Department’s budget. The Department states it does not know how many home inspectors exist in the state that will be required to be licensed, and therefore cannot determine increased revenues and expenditures resulting from this Board. Using two entities administratively attached to the Department of State as examples, annual general fund expenditures for the Home Inspectors Board could fall between $78,830, which represents a 1/6 share of the FY 2006 budget for the Joint Board of Licensure, and $779,044, the FY 2006 budget for the Real Estate Commission. The Home Inspectors board would be required to raise revenue equal to 125% of expenditures; therefore, annual general fund revenue is estimated to be between $96,038 and $973,805.